TMI Blog1984 (8) TMI 77X X X X Extracts X X X X X X X X Extracts X X X X ..... t year 1963-64 showing an income of Rs. 5,604. However, the assessment was made under s. 143(3) of the I.T. Act, 1961 (hereinafter referred to as the " Act "), on an income, of Rs. 17,628. Subsequently on coming to know that some hundi loans and unexplained share capital appearing in the balance-sheet had not been shown by the respondent in the return, a notice was issued under s. 148 of the Act. In response to that notice, the respondent appeared and filed its return. Subsequently, however, it moved an application before the IAC offering to be assessed on hundi loans amounting to Rs. 1,52,000 and unexplained capital amounting to Rs. 5,075. On this basis, the reassessment was completed on a total income of Rs. 1,84,145. Penalty proceedings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the facts and in the circumstances of the case, the assessee was liable to penalty under s. 271(1)(c) of the Income-tax Act, 1961." The Tribunal thereupon drew up a statement of case and referred the aforesaid question of law for the opinion of this court by its order dated January 19, 1976. It was urged by Shri Markandey Katju, appearing for the CIT, that the decision of the Supreme Court in the case of Anwar Ali [1970] 76 ITR 696 was clearly distinguishable. According to him that was a case where the explanation submitted by the assessee had been disbelieved and it was held that the mere circumstance that the explanation submitted by the assessee had been disbelieved could not be sufficient to impose penalty. According to Shri Kat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the amount which represented his income and it represented his concealed income. The assessee in the instant case having readily agreed to the inclusion of the amount as his income, the levy of penalty was justified. The learned judges of the Madras High Court in taking the aforesaid view relied on a decision of the Bombay High Court in Western Automobiles (India) v. CIT [1978] 112 ITR 1048, where the decision of the Supreme Court in Anwar Ali's case [1970] 76 ITR 696, was distinguished by the Bombay High Court by observing that that decision was not applicable to a case where the addition was not by a mere rejection of the explanation of the assessee but on account of an admission of the assessee that the amounts may be added as its income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to this court, relying on the decision of the Supreme Court in the case of Anwar Ali [1970] 76 ITR 696, it was held that the order of the Tribunal was correct and that the assessee was not liable to pay penalty under s. 28(1)(c). It was further held that mere failure of an assessee to prove the nature and source of an income would not lead to the inference that he has deliberately concealed the income or has furnished inaccurate particulars thereof. The income-tax department's burden of proving that the assessee's case falls under s. 28(1)(c) would not be discharged in such a case and penalty cannot be imposed. Reliance was also placed by counsel for the respondent on the decision of a Division Bench of the Gujarat High Court in CIT v. V ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AC referred to above did not amount to admission of the concealment of the income of the relevant year and was not sufficient to levy penalty on the assessee and that the Revenue must prove that the receipt of the amount in dispute constituted income of the assessee for the relevant year. Reliance was placed on the decision of the Supreme Court in the case of Anwar Ali [1970] 76 ITR 696. Gumani Rant Siri Ram v. CIT [1972] 85 ITR 67 (P H) was also a case where the assessee had made a statement surrendering a certain squared up amount and on its basis an order of assessment was passed. Subsequently, penalty was also imposed on the assessee. It was held in that case, by the Punjab High Court that penalty could not be levied merely because ..... X X X X Extracts X X X X X X X X Extracts X X X X
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